EFF slams Treasury for ‘unlawful’ R300m lotteries transfer

The Economic Freedom Fighters (EFF) said it is appalled by reports of the National Treasury receiving an unlawful transfer of funds from the National Lottery Commission (NLC).

It demanded the return of the funds if this was proven to be correct.

The R300 million in question was provided by the NLC from its surplus funds, despite it rejecting 6 500 requests for funding from charities and individuals in the 2022/23 financial year.

It also rejected 920 requests for funding during the 2023/24 financial year while 145 applications were awaiting adjudications.

Senior counsels advise against treasury transfer

City Press reported it had learned the National Lottery Commission (NLC) was advised by legal experts to not transfer money into the Treasury because it was “unlawful and in violation of the Constitution”.

The EFF on Monday condemned the transfer that it says occurred under the watch of Finance Minister Enoch Godongwana.

“National Treasury, led by Godongwana, unlawfully instructed the NLC to transfer R1.2 billion of its surplus funds, to the National Revenue Fund in 2023 for no verifiable purposes.

“This instruction, which resulted in R300 million being transferred from the NLC to Treasury, amounts to a violation of the Public Finance Management Act (PFMA) and the Lotteries Act which legislates how the institutions funds ought to be utilised,” EFF national spokesperson Leigh-Ann Mathys said.

She said the law prescribes the NLC to use its resources to fund grassroots projects such as non-profit organisations, cultural bodies, educational institutions and sports clubs.

“Additional to this, Section 25 (2) of the Lotteries Act is explicit that any surpluses must be carried forward from year to year, to be used in line with the purposes prescribed in the Act.”

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EFF says NLC deliberately saved money to make transfer

Mathys said it was “alarming” that the commission had any surpluses despite rejecting so many funding applications.

“It is important to note that none of the provisions in the Lotteries Act allows the NLC to fund state entities and departments, and the NLC received adequate legal advice that the instruction from the National Treasury was unlawful and unconstitutional.

“This leaves the EFF with a suspicion that those who preside over the distribution of funding at the NLC were deliberately not utilising funding, so as to leave room for Treasury to unlawfully raid its funds.”

Mathys slammed this as proof Treasury has become a “law upon itself” without accountability.

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“Under Enoch Godongwana the SA Treasury has gone rogue, and is characterised by austerity, disregard of its responsibilities, and disregard for the law and impunity.”

Furthermore, it was misusing its authority to deprive institutions in need.

“It is the perennial budget cuts instituted by the SA Treasury that have crippled Statistics South Africa, the South African Post Office (Sapo) and the Office of the Auditor General, and all have had their abilities to execute their necessary tasks hindered by Treasury’s misguided fiscal framework, with Sapo effectively collapsed.”

The EFF said it will seek accountability for the transfer.

“If it is proven to be correct, this money must be returned so that it can be utilised for its prescribed purposes.”